Confusion, animosity common in music licensing

TOWN SQUARE

Andy Lee offered to pay $4,000 to a music licensing company and promise not… (KEVIN MINGORA, THE MORNING…)

May 16, 2012|Bill White

Andy Lee says that after he opened Braveheart Highland Pub in Hellertown several years ago, he occasionally featured live music.

As a result, he has been contacted many times by all three of the major music licensing organizations — Broadcast Music Inc., American Society of Composers, Authors and Publishers and Society of European Stage Authors & Composers — about purchasing a license to play their songs. He ignored their demands and eventually scaled back the live performances to almost nothing.

He said there have been none since two 2010 shows that led to an Oct. 18, 2011, BMI lawsuit against the Braveheart and owner Lee. As I wrote last time, an undercover agent documented the three songs performed those two nights that were written by artists whom BMI represents.

Lee continued to get letters, calls and visits from the music licensing organizations, but he still was shocked when he learned last fall that BMI had sued him and Braveheart — more than a year after those two 2010 concerts — for copyright infringement. The suit asked for damages, legal fees and an order that would prevent him from further infringing on BMI's copyrights.

Lee's lawyer researched possible defenses and concluded it would be best to settle the case.

"I told my attorney, 'I just want this to go away,'" said Lee. "I'll pay a fine, but I don't want to buy a license."

So negotiations began. I won't get into all the details of the talks, which are continuing, but Lee originally offered $4,000 and a promise not to provide any live entertainment. That amount was not acceptable to BMI, which among other things wanted him to buy a 2012 license permitting live music, which Lee doesn't use anymore. He also says their proposed licenses have misrepresented his seating capacity and the other ways he uses music in the place, increasing the price.

Lee checked around and found that other restaurants, including some with live music, were paying less under negotiated rates — I confirmed that off the record with one of them — and he kept getting more angry, arguing, "They make up the rules as they go along." He said federal copyright laws need to be modernized to protect small businesses such as his.

"My intent is to get more entities to fight this," he said. He has resigned himself to buying a license, but only if the provisions accurately represent what he's doing.

Peter Kilgore, general counsel for the National Restaurant Association, told me licensing rates often are negotiable and that they constitute the most common complaint he receives. The rates demanded by the licensing organizations never get tested in court because the disputes are over amounts far smaller than what it would cost to litigate them — which he suggested may be just as well from the licensers' standpoint.

"I think if they had to justify in court how they came up with dollar amount, it's not something they'd want to do."

Ari Surdoval of BMI said Lee shouldn't have felt blindsided. Surdoval told me the file shows that since 2008, the nonprofit organization has made 55 calls to Lee, eight times speaking to him directly, one time for more than 25 minutes, along with 26 letters and other correspondence.

He said they made it clear to Lee that his file was in "prelegal review," and Lee ignored these warnings, forcing their hand. "Being in court with this gentleman is absolutely the last place BMI wants to be," Surdoval said.

He pointed out that 86 cents of every dollar collected is returned to songwriters and composers, money that is vital to what he describes as "the smallest of small businesses." What's more, he says, music is a powerful driver of business for bars and restaurants, and as a former bartender, he knows the average daily cost of a license amounts to about the markup on one drink.

Of course, these organizations don't just pursue bars and restaurants. As I noted last time, warnings from the licensing group ASCAP led to Northampton County turning the music off in all its buildings, and even the nonprofit Lehigh Valley Zoo was hit up for BMI and ASCAP licenses because of music it plays at its fundraisers.

I put a note on my blog asking for musicians to offer their perspective, and got a call from Don Hart of Nashville, an award-winning musician with expertise in arranging, composing and producing music for all kinds of venues and genres. He and I grew up in the same Levittown, Bucks County, neighborhood.

He told me these are tough times for musicians, what with music downloading and record companies trying to cut back on releasing CDs. Artists are in no position to track down all the ways their music is used so they can get the compensation they're entitled to under federal copyright law, so he's grateful that BMI and the other organizations are there to do it for them.

Still, he understands why this way creates such confusion. People take public music for granted. "I don't want to come off as totally unappreciated, but I don't think people get what goes into it sometimes," he concluded. "I think in some ways music is just expected to be there."